Here are ten fearless predictions for the coming year. We will revisit these at the end of the year to see how we did. If you have some insights or questions, let us know at Info@cleanstart.org and we will include those in a future newsletter.
- Electric Vehicle registrations in Sacramento County will exceed 7,000 in total. Through August 2018, the cumulative number for the county was 5,303, with 1,109 added to date in 2018. In the ten-county CleanStart region, the cumulative number was 13,791 with 2,714 added in 2018 through August. For that region, the total may exceed 18,000 by the end of 2019. For all of California, the cumulative number to date is 270,459. Of those, 4,569 were fuel cell vehicles, by the way. Through August, 43,207 electric vehicles were added statewide in 2018, about 5,000 per month. For perspective, the total number of cars registered in California is about 14.5 million.
- Tesla will barely reach annual cash flow breakeven; production will exceed 300,000 vehicles for the year. Telsa produced over 180,000 vehicles in the 12 months ending 9/30. Over the same period it was still negative $600 million on cash flow and lost $2 billion in net income. The third-quarter positive net income is encouraging, but may not be a trend. With 300,000 vehicles delivered, Tesla should be able to climb out of the hole it is in. It still has $2.5 billion in cash reserves. For perspective, globally Porsche produced 246,000 cars in 2017 and Volvo 571,000. Worldwide car production is a whopping 73.5 million.
- High Speed Rail funding will be dramatically reduced, freeing money for other carbon reduction projects. State law requires 25% of the proceeds from the auction of carbon allowances go to the High Speed Rail project. The last quarterly auction in November 2018 raised $813 million, sending $203 million to High Speed Rail. The project likely will be less popular with Gov. Newsom given its escalating price tag and waning public support. The legislature could quickly eliminate or reduce the 25% allocation.
- Prices for a ton of carbon emission reduction will rise, but not break $20. The price in the cap-and-trade auctions had been steady at $12-13 for 2015 and 2016, but has now risen above $15. The increased demand for carbon-free electricity as a result of SB 100, and the extension of the cap and trade program for an additional ten years to 2030 has been adding pressure on prices. However, progress in finding greater supplies of emission reduction projects will moderate any upward price pressure.
- The installed cost of solar PV will rise modestly, slowing the trend of the last five years. The tariffs on imported PV panels from China are affecting the market price here, even while panel prices in China continue to fall. Installed costs for systems under 10 kW fell from $5.46/kW in 2015 to $4.58/kW in 2018 so far, according to www.californiadgstats.ca.gov. Panel prices are now only a minor part of the total installed cost, so downward trends in other costs may continue. But increased inflation and interest costs may be a factor. The net result will be a 2019 cost of $4.60-4.70/kW.
- A major investment in incubator space will be made in the region. It will include equipment for making and testing prototypes. Momentum has been gathering for some time.
- A new cleantech company will move here. The shift of companies from the Bay Area to here to take advantage of lower costs and an easier lifestyle has been happening slowly. In 2018, Highlands Power, a manufacturer of high-efficiency electric motors for EVs, moved its HQ here from the Bay Area. Propel Fuels did the same in 2015, returning after leaving this region for the Bay Area earlier. We expect the trend to continue.
- Expanding number of startup storage companies. This is a hot area globally and there a number of creative geniuses in the region we expect will launch new companies in this sector.
- Two local clean tech companies will receive over $25 million each in new investments. Investment proposals are floating around now and there are good indications of imminent success.
- Three companies will be sold or merged. The exit process has been slow in the region. Our expectations are modest.
ABOUT THE AUTHOR
Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.